This review aims to provide a literature overview as well as the authors' personal account to the studies of Laponite® (Lap)/Polyethylene-oxide (PEO) based composite materials and their applications. These composites can be prepared over a wide range of their mutual concentrations, they are highly water soluble, and have many useful physico-chemical properties. To the readers' convenience, the contents are subdivided into different sections, related with consideration of PEO properties and its solubility in water, behavior of Lap systems(structure of Lap-platelets, properties of aqueous dispersions of Lap and aging effects in them), analyzing ofproperties LAP/PEO systems, Lap platelets-PEO interactions, adsorption mechanisms, aging effects, aggregation and electrokinetic properties. The different applications of Lap/PEO composites are reviewed. These applications include Lap/PEO based electrolytes for lithium polymer batteries, electrospun nanofibers, environmental, biomedical and biotechnology engineering. Both Lap and PEO are highly biocompatible with living systems and they are non-toxic, non-yellowing, and non-inflammable. Medical applications of Lap/PEO composites in bio-sensing, tissue engineering, drug delivery, cell proliferation, and wound dressings are also discussed.